Home loan approvals still too high: RBA

The Reserve Bank of Australia (RBA) governor Ian Macfarlane is warning the amount of money being borrowed in Australia for housing is still at unsustainably high levels.

His comments come despite a 20 per cent decrease in housing loan approvals since the market peaked in October 2003.

Speaking at a Macquarie University lecture in Sydney, Mr Macfarlance kept his options open for future interest rate rises.

"There is no doubt that there are some areas of housing - Melbourne and Sydney apartments - where over supply is pushing down prices and off the plan purchasers and some developers are feeling the pinch," he said.

"But elsewhere the slowdown, if any, has been more muted.

"We will naturally be keeping a close eye on these developments to see that the return to a more sustainable rate of credit growth continues."